Encore Boston Harbor Sold For $1.7 Billion To San Diego-Based Realty Income

In February, Realty Income Corporation made a significant move into the gaming sector by revealing its intention to acquire Encore Boston Harbor. Recently, on December 1st, the company successfully completed the purchase of the casino from Wynn Resorts through a cash transaction worth $1.7 billion. This sale coincides with the upcoming launch of Massachusetts sports betting, anticipated to happen in the following months.

The retail sports betting options at Encore Boston Harbor will include two sportsbooks, namely WynnBet and Caesars Sportsbooks. In the sale-leaseback agreement, Wynn Resorts will still be responsible for operating the property.

Basics of the Transaction

Realty Income, a prominent real estate investment trust (REIT), boasts ownership of around 11,000 real estate properties that are subject to long-term net lease agreements with commercial clients. One of its notable transactions includes a 30-year long-term net lease agreement with Wynn Resorts.

In February, Sumit Roy, President and CEO of Realty Income, stated that their investment philosophy revolves around achieving favorable risk-adjusted returns. They achieve this by investing in strategically significant properties alongside industry-leading partners. Roy expressed satisfaction with the establishment of a new partnership with Wynn Resorts, which contributes to the expansion of their net lease investment portfolio.

According to Realty Income, the transaction offers the following benefits:

• Generation of immediate returns
• Healthy contractual rent growth
• Collaboration established with a prominent gambling operator in a thriving sector

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Encore Boston’s Finances

Wynn Resorts benefits from the deal by monetizing its assets, gaining liquidity, and preserving ownership of the 13 acres of land in Everett where the casino is located.

Encore Boston has surpassed both MGM Springfield and Plainridge Park casinos in terms of performance in the state. Notably, the Boston-based casino has even managed to surpass its pre-pandemic gross gaming revenue. Prior to the three-month closure of all state casinos in April 2020 due to COVID-19, Encore Boston achieved its highest gross gaming revenue of $54 million in December 2019, just five months after its opening. Fast forward to 2022, and the casino is now averaging an impressive $60.2 million gross gaming revenue per month, with a peak of $64.8 million in March. October’s gross gaming revenue reached $62 million.

Realty Income’s release in February mentioned that the revenue growth was one of the purchase factors for the acquisition.

In terms of national figures, gaming revenues have rebounded to pre-COVID levels. Additionally, the growth rate of gross gaming revenue in Massachusetts during the fourth quarter of 2021 was twice as high as that of the overall industry.

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Sports Betting in the Commonwealth

In November, Encore Boston Harbor officially applied to the Massachusetts Gaming Commission (MGC) for permission to provide sports betting services. The MGC is currently in the process of developing regulations for sports betting in the state, evaluating applications, and organizing public meetings where individuals can express their opinions and concerns regarding sports wagering.

Massachusetts retail sportsbooks are set to launch in late January, just in time for the Super Bowl. Mobile betting apps are anticipated to come shortly after, in late February or early March.

Encore Boston Harbor is fully prepared for retail and online sports wagering with a WynnBet-branded sports bar that features betting windows, expansive viewing screens, and an LED score ticker. Once the industry receives approval, Encore Boston Harbor will be all set to offer these exciting amenities.